(Bloomberg) When it comes to the commercial-mortgage bond market these days, location is everything.

From Webster, Texas to Providence, Rhode Island, borrowers in the U.S. are coming up short, unable to get new loans as about $59 billion in mortgages packaged into bonds comes due in 2012, according to data compiled by Bloomberg. In contrast, $930 million has been refinanced on two New York skyscrapers in the past month; Vornado Realty Trust's Park Avenue tower and Sheldon Solow's 9 West 57th Street, home to Chanel SA and KKR & Co.

Lenders are reluctant to venture from major urban centers, making it harder for property owners in smaller cities to refinance even as unemployment falls to the lowest since February 2009 and confidence in the economic recovery grows. Banks and insurance companies are funneling cash to a select pool of borrowers as mortgages from the real-estate boom start maturing after values fell 42 percent since 2007.

"Having a New York City trophy asset in a CMBS deal, if it is a true trophy, generally is a positive for investors," said Julia Tcherkassova, a commercial-mortgage bond analyst at Barclays Capital in New York. Outside of major metropolitan areas "there are going to be fewer competitors bidding and when the buildings lose tenants it's difficult to replace them."

More than half of the $19 billion in commercial property loans packaged into bonds in 2007 that mature this year may fail to be refinanced, according to Standard & Poor's. Almost $8 billion in commercial mortgages on New York real estate comes due this year, including $3 billion of five-year loans, according to Trepp LLC, a mortgage data provider.

'Trickle' Of Financing

Insurers and international banks have zeroed in on lending to the strongest borrowers in the best markets since 2010, according to Ben Thypin, director of market analysis for Real Capital Analytics, a New York-based research firm. While appetite for so-called trophy assets will continue in 2012, some lenders may push into smaller markets, he said.

"One of the big questions this year is whether or not the trickle of activity we saw move into secondary and tertiary markets in 2011 becomes more of a flood," Thypin said. "The economy is a big determining factor."

The U.S. added 200,000 jobs in December and the unemployment rate declined to an almost three-year low of 8.5 percent. Investor confidence in commercial property debt is also rising with a benchmark gauge at about the highest since July.

The CMBX.NA.AJ.4, tied to classes of originally AAA rated commercial debt most exposed to losses, has jumped 19.5 cents to 66.2 cents on the dollar since Oct. 18, after dropping from 84.8 in February, according to Markit, the index administrator.

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